G.R. No. 196936 - Ampeloquio vs. Jaka Distribution, Inc.

Petitioners: Primitivo Leveriza, Fe Leveriza Parungao, Antonio C. Vasco – heirs/successors of Rosario C. Leveriza.
Respondents: Intermediate Appellate Court (IAC), Mobil Oil Philippines, Inc. (Plaintiff-Appellee), and Civil Aeronautics Administration (CAA).
Subject matter: Dispute over three contracts of lease involving the same parcel of land at Manila International Airport (MIA), measuring approximately 4,502 square meters.

Contract A: Lease executed April 2, 1965, between the Republic of the Philippines (represented by CAA) as lessor and Rosario C. Leveriza as lessee, covering 4,502 sq. m. for 25 years at P450.20 monthly rent.
Contract B: Sublease executed May 23, 1965, between Rosario C. Leveriza as lessor and Mobil Oil Philippines as lessee, covering 3,000 sq. m. of the parcel for 25 years at P1,500 monthly rent.
Contract C: Lease executed June 1, 1968, between CAA as lessor and Mobil Oil Philippines as lessee for 3,000 sq. m. for 29 years, with rent calculated per square meter.

Contract A covered the whole 4,502 sq. m., whereas Contracts B and C involved a reduced portion of 3,000 sq. m.
The dispute arises because CAA (through its Airport General Manager) cancelled Contract A on June 28, 1966, citing unauthorized sublease (Contract B) without CAA’s consent.
Mobil Oil Philippines claims Contract A and B were properly cancelled and Contract C is the only valid lease.
Petitioners (heirs of Rosario Leveriza) argue that Contract A remains valid, Contract B is a valid sublease, and Contract C is void for lack of proper approval.
CAA initially disputed the cancellation authority of its Airport General Manager but later affirmed the ability of its Administrator to execute lease contracts without Secretary’s approval under RA 776.

Contract A validly cancelled on June 28, 1966.
Contract B ceased to have effect with Contract A’s cancellation.
Contract C is valid and subsisting.
Monetary refunds ordered: CAA to pay petitioners P32,189.30 plus 6% interest; petitioners to pay plaintiff P48,000 plus 6% interest.
Various counterclaims dismissed.

Intermediate Appellate Court (Feb 29, 1984) affirmed the trial court decision in toto.

IAC erred in holding that CAA Administrator had authority to lease real property without Secretary’s approval.
IAC erred in holding that CAA Administrator had authority to cancel a lease contract without Secretary’s approval.
IAC erred in ruling that Contract B was executed without CAA’s consent.

Whether the Administrator of the Civil Aeronautics Administration (CAA) had the statutory authority to:

Execute lease contracts over government-owned real property without the approval of the Secretary of Public Works and Communications.
Cancel an existing lease contract previously approved by the Secretary without his approval.

Whether Contract A (lease from CAA to Rosario Leveriza) was validly cancelled due to a sublease (Contract B) executed without CAA’s consent.

Whether Contract B (the sublease from Rosario Leveriza to Mobil Oil Philippines) required prior consent from CAA to be valid.

Whether Contract C (lease between CAA and Mobil Oil Philippines) is valid despite alleged lack of approval by the Secretary of Public Works and Communications.